Housing estate ombud got it wrong, Supreme Court rules
The fight began in 2007, when Riverside residents challenged the contributions they were expected to pay to Waterford Estate Homeowners Association after the entities merged.
Image: Freepik
After more than a decade of bitter disputes over levies and membership, the Supreme Court of Appeal has finally clarified the rights and obligations of a hundred homeowners within a housing estate.
The fight began in 2007, when Riverside residents challenged the contributions they were expected to pay to Waterford Estate Homeowners Association after the entities merged.
Riverside residents argued the costs should be lower than those of full title owners.
What followed was years of settlement agreements, disputes over payments, and legal wrangling that ensnared more than 100 respondents, from the Community Schemes Ombud Service (CSOS) to individual unit owners.
Waterford had previously applied to resolve disputed contributions for 2017–2018, including arrears and interest, but adjudicator Khosi Mabaso, on behalf of CSOS, ruled that Riverside unit owners were not members of Waterford.
Mabaso also decided that levies had been miscalculated. She ordered mixed payments: Riverside to pay R566,355.04 for 2019, and Waterford to repay R939,151.58 for 2020, while interest was also misapplied.
CSOS is a South African public entity that resolves disputes and oversees governance in sectional titles, homeowners’ associations, and housing co-ops, providing an affordable alternative to courts for financial, behavioural, or management issues.
The Supreme Court of Appeal overturned these findings, confirming that Riverside sectional title unit owners automatically became members of Waterford when the schemes merged.
Membership is compulsory, rooted in the development’s township conditions, Waterford’s own articles, and the 2007 settlement agreement, it found. The bench also found that the adjudicator’s misreading of membership had distorted the calculation of levies and contributions.
Specific costs for 2017–2018 – including garden services and major capital expenses including security infrastructure – had not been properly calculated, the court found. This was because the adjudicator had failed to consider relevant evidence and properly apply the settlement agreement’s formula.
Interest on arrears was clarified: 1% per month from February 2019, and the correct prescribed rate before that.
All levy disputes for 2017–2020 were remitted for reconsideration by a new adjudicator.
The court also dealt with costs: Waterford must cover the expense of its failed constitutional challenge, while Riverside’s lawyers were ordered to pay for the unnecessary inclusion of eight volumes of irrelevant documents in the appeal record.
The ruling ends a long-running saga of contested payments, membership disputes, and legal manoeuvring, formally bringing Riverside unit owners into the Waterford Estate fold and setting the stage for a proper recalculation of contributions.
IOL BUSINESS